The choice of your financial advisor has to be your initial decision when accepting that the “retirment years” for those of us in our 50’s and 60’s require some measure of professional financial guidance. Numerous studies by the academic world have shown over and over that those Baby Boomers who have an advisor not only out perform their friends who go it alone, but have a greater sense of peace of mind and confidence in the future as well. That makes sense given all the fear mongering and mis information on TV, the press, the national news media. A trustworthy, friendly, smart advisor is like a guide in the jungle, or having a GPS instead of flying by the seat of your pants. Not that you’ll avoid ALL the pot holes, just many of the more costly ones. Remember that financial planning is a process not an event. You will want to have an ongoing relationship with your advisor unless you simply want to buy a product.
So, the first quesiton is: Who should I choose as my advisor? It’s an unfortunate fact that just about anyone can call themselves “Financial Advisor”. However,the most likely are: Life Insurance agent, annuity salesmen, stock brokers, CPA, Attorneys, Enrolled Agents, Banking Trust officers and Registered Investment Advisors (RIA). Then there are the alphebet soup of professional designations: CPA, JD,LLM, CLU, ChFC, CFP, CFA, EA, MBA,PhD. A logical and resonable question to ask is: What do those letters stand for?, what does it take to get them? What sort of registration and licensing is required? How does that training help me?
One of the first questions to ask is: What is your service and how do you get paid? How long have you been in business? What is your website address? Do you have any adverse background issues? Do you fully disclose your fees and costs? Do you have a contract that details your services and costs?
The answer to some of these and more important issues are forth comming in the next sevearal issues- Who’s your Financial Advisor? (and does it matter?) #2- Different types of Financial Adviosrs and how they get paid.